Local digital advertising will grow 9% to $92.8 billion in 2022, accounting for two-thirds of all ad spending, according to a new forecast from Borrell Associates. By 2025 it is expected to account for 72% of all spending. A significant slice of that massive pie, about 14%, is spent with locally based media companies – including radio, TV, and print – which Borrell refers to as “obtainable digital revenue.”
“Even in the smallest of markets, it amounts to millions of dollars up for grabs,” Borrell says in “2022 Benchmarking Local Media’s Digital Revenues.” “The most aggressive media companies get more than half of this obtainable revenue in their markets. That is, top performers can dominate digital sales so much that they leave dozens of local competitors fighting for the scraps.”
These top performers getting their unfair share of the local digital ad pie are typically media businesses that offer “a cornucopia of marketing products rather than just one,” Borrell says. In other words, they offer all of the digital ad units and marketing services a local business wants, in addition to their core legacy ad products.
As 2022 progresses, more and more local media companies are capitalizing on streaming video advertising, or OTT. According to Borrell, it is already the largest source of digital revenue for 17.7% of local media companies. “Advertisers are migrating quickly to video advertising, pushed in part by the local media reps who are pitching it intensely, and perhaps also by high pay-per-click rates for search engine advertising,” the report says. By 2025, OTT advertising is on track to surpass that of paid search.
After digital ad spend slowed to single digits two years ago, the pandemic provided a major catalyst triggering a renewed interest in digital marketing. That in turn re-energized local media’s digital initiatives. One in ten local media managers project their digital ad revenue will rocket up 50% or more this year with a nearly-universal outlook for continued gains. A flash survey conducted by Borrell this month finds 93% of managers are forecasting another growth year for digital revenue.
The data shows 42% of managers had digital ad revenue growth of 25% or more last year. And three months into 2022 the survey finds 40% expect a similar rate of increase again this year. A majority of managers said they anticipate gains to be not quite that robust, however, as 53% estimate they will post gains in the 1% to 24% range.
Comments